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Automotive R&D in India headed for a shift

Aparna Dutt Sharma, Chief Executive Officer, IBEF

Sep 15, 2014 3:47 PM

The R&D ecosystem in India is undergoing fundamental transformation. Indian automotive manufacturers are investing heavily in the race to stay ahead on the innovation curve in the global automotive industry. In this drive, they are attracting some of the best global talent to their R&D divisions. On the other hand, foreign companies are successfully leveraging the talent pool in India and endeavouring for higher degrees of localisation.

Indian firms that are frontrunners in this regard include Hero, Mahindra & Mahindra (M&M) and Tata Motors. Over the past three years, R&D investments by the top three Indian two wheeler and four wheeler companies have grown at a compound annual growth rate (CAGR) of 19 per cent. M&M has around 2,500 R&D engineers in its team today as compared to just 90 in 1993. Hero is investing Rs 500 crore to build an R&D centre at Kukas near Jaipur, Rajasthan. It has roped in BMW veteran Markus Braunsperger, who will lead a 500 people team that will align with Hero’s global technology partners. Tata Motors has its R&D operations in Pune, Coventry (UK) along with the Trilix workforce (Italy). Its R&D team now comprises 4,500 people growing by 5-10 per cent over the past year. Its operations are headed by Tim Leverton (formerly part of JCB and BMW). On the other hand, foreign firms including BMW, Mercedes, Renault-Nissan, Volvo, GM and Honda have also set up R&D centres in India over the past few years.

These developments are attracting a huge influx of quality global R&D talent into India thereby accelerating the maturing of the R&D ecosystem in the country across the three fundamental areas of R&D - fundamental research, designing and engineering of new vehicle models, and development. India is steadily gaining in strategic importance for both Indian and foreign multinational companies as a global R&D hub.